School Aid portion includes one-time incentive grants linked to multiple factors, including competitive bidding of non-instructional services such as food services

Today the Legislature completed their work on the FY 2011-2012 Budget prior to the Governor’s deadline of May 31. The Legislature has not finished the budget process this early in 30 years.

Specifically, this morning the House held a second conference committee process rolling up all the conference committee reports from last week into two omnibus budget bills, House Bill 4526 covering state departments and House Bill 4325 covering school aid, community colleges and higher education. The House and Senate quickly voted (mostly along party lines) to concur with the two bills. After completing the enrolling process, the two omnibus budget bills will be sent to Governor Snyder who has the power to veto items in the budgets before adding his signature.

Among the many changes and funding reductions in the School Aid portion of the budget, $154 million was added for “Best Practices Incentive Grants” (Section 22f), providing one-time, $100 per pupil grants for districts that meet 4 out of 5 of the following ‘best practices:’

1)Have a 90/10 premium share for employee health benefits;

2)District acts as policy holder of health insurance policies. A district that does not directly employ its staff would be considered to have satisfied this practice;

3)Enter into or continue consolidation plans;

4)Obtain competitive bids on at least one non-instructional service totaling more than $50,000; or

5)Make a public dashboard with financial indicators and performance indicators.

Penalties are added for school districts that intentionally submit false information.

Exact language on competitive bidding of non-instructional school services in the bill:

(D) THE DISTRICT HAS OBTAINED COMPETITIVE BIDS ON THE PROVISION OF PUPIL TRANSPORTATION, FOOD SERVICE, CUSTODIAL, OR 1 OR MORE OTHER NONINSTRUCTIONAL SERVICES WITH A VALUE OF AT LEAST $50,000.00.

We will have to wait and see how the program is implemented, but it appears that subsection (4) requires a district to obtain competitive bids on a particular non-instructional service, but not actually contract out that service. To review this and other details of the education omnibus budget bill, go to:

Impact on Privatization Legislation Passed by the House Education Committee Earlier This Year

With this competitive bidding language included in the FY 2011-2012 Budget, privatization legislation passed by the House Education Committee in March may be considered unnecessary. As you may recall, House Bill 4306 (H-4) (sponsored by Rep. Agema) also required school districts to obtain competitive bids for noninstructional services. HB 4306 (H-4) is currently awaiting a vote on the House floor and probably will be left on the calendar or referred back to the House Education Committee. The bill remains viable until the end of the 2011-2012 session and could receive renewed attention should the sponsor, Rep. Agema (R-Grandville) and other bill supporters become dissatisfied with the outcome of the budget language.

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